Commercial parlance test governs tax classification; departmental clarifications are only relevant factors, not binding directions.

In tax classification disputes, the assessing authority must independently determine the true character of the goods by applying the commercial parlance test. Departmental clarifications or letters may be considered only as one relevant factor, but they are not binding and cannot replace an independent assessment. Where the order merely relies on such clarifications without a fresh speaking evaluation of how the product is understood in trade, the classification decision is legally unsustainable. The assessment was therefore set aside and the matter remitted for reconsideration through an independent order uninfluenced by the departmental letters.

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Issues: Whether the assessing authority, while classifying unbranded furniture for tax purposes, was bound by departmental clarifications and whether the classification had to be determined independently by applying the commercial parlance test.

Analysis: The impugned assessment was founded on departmental letters denying the benefit of the exemption notification. In classification matters, the assessing authority is not bound by a superior officer's clarification and must independently determine the true character of the goods. The relevant test is how the product is understood in commercial parlance and in trade, while departmental circulars may only serve as one relevant factor and not the sole basis for decision. Since the order did not reflect such an independent exercise, it could not stand.

Conclusion: The assessment order was set aside and the matter was remitted for fresh consideration by an independent speaking order uninfluenced by the departmental clarifications.

Ratio Decidendi: In classification disputes, an assessing officer must independently apply the commercial parlance test and cannot treat departmental clarifications as binding.

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